Spillovers from Online Engagement: How a Newspaper Subscriber’s Activation of Digital Paywall Access Affects Her Retention and Subscription Revenue

Adithya Pattabhiramaiah (), Eric Overby () and Lizhen Xu ()
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Adithya Pattabhiramaiah: Marketing, Scheller College of Business, Georgia Institute of Technology, Atlanta, Georgia 30308
Eric Overby: Information Technology Management, Scheller College of Business, Georgia Institute of Technology, Atlanta, Georgia 30308
Lizhen Xu: Information Technology Management, Scheller College of Business, Georgia Institute of Technology, Atlanta, Georgia 30308

Management Science, 2022, vol. 68, issue 5, 3528-3548

Abstract: Newspapers are increasingly reliant on subscription revenue as advertising spend shifts to online platforms. Many newspapers have implemented paywalls in an attempt to boost subscription revenue. We study whether and how paywalls can help newspapers boost subscription revenue by retaining existing subscribers. Most major newspapers offer free access to paywalled content to subscribers to the print edition, which may help the newspaper retain subscribers by making their subscriptions more valuable. We leverage variation in whether and when existing subscribers activated access to the paywall of a top 30 North American newspaper. Our identification strategy accounts for self-selection in subscribers’ decisions to activate paywall access. We find that a subscriber’s activation of digital access decreases the risk of her canceling her subscription by about 31% and increases her subscription revenue by 7%–12%. In other words, digital activation improves subscriber retention and the associated subscription revenue. This suggests a crosschannel spillover in which the online product (the paywalled website) increases customers’ valuation for the offline product (the printed newspaper). Our results have implications not only for the newspaper industry but also for firms in other industries that offer subscribers to one product free or subsidized access to a complementary product.

Keywords: digital monetization; newspaper paywalls; customer retention; matching; synthetic control; causal forest (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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